Make "Payment Convenience" a Key Term in Your RCM Vocabulary

For a while now, there has been a steady drum beat in the healthcare press regarding MACRA/MIPS and the importance of provider participation. It is no stretch to say an entire industry has grown out of the importance of value-based reimbursement and the need to fully and meaningfully participate. Registries, consultants, and other service-focused organizations are doing God’s work in helping providers navigate the complexities of MACRA/MIPS and alternative payment models. We work with some of those firms and I am thankful for them and the peace of mind they bring to providers.

Let’s assume for now that value-based reimbursement remains in the realm of Medicare, and as a provider you utterly fail to demonstrate value. That’s going to cost you up to 9% of your Medicare reimbursement by the year 2022. You can do the math on what that means for your practice and whether or not it is significant to your bottom line.

Value-based payment is here to stay and providers who ignore it do so at their peril. But this article isn’t about MACRA/MIPS and value-based reimbursement.

I suspect all of this occupation with value-based payment has unintentionally cast our focus away from the much bigger and more impactful matter of rising patient-responsible balances. InstaMed’s Trends in Healthcare Payments Seventh Annual Report: 2016 offers some startling statistics.

Consumers are demanding more from healthcare.

92% of consumers want to know payment responsibility prior to a provider visit

74% of consumers are confused by Explanation of Benefits (EOBs) and medical bills

73% of providers report that it takes one month or longer to collect from patients

Think you don’t have a problem? A quick look at your EOM reports may suggest (shout?) you do. If everything is fine, quit reading now and move on to something more important. Otherwise, stay with me.

How did this happen? The InstaMed report suggests several key factors.

The average deductible for covered individuals with single coverage doubled from $735 in 2010 to $1,478 in 2016.

The average health insurance premium for family coverage has increased by over 83% since 2005

The total volume of consumer payments to providers increased by 58% from 2013 to 2016.

72% of providers report an increase in patient responsibility since 2015.

73% of providers report that it takes one month or longer to collect from a patient.

Most families don’t operate from a budget, and of those who do, not all of them budget for healthcare. That means that after the phone, cable, and Netflix bills are paid, if there is anything remaining, the doctor might get paid – that is if the responsible party doesn’t think healthcare is supposed to be free.

The bottom line is that increasing consumer responsibility requires that providers must collect a larger portion of their revenue directly from patients. Yet, according to a UnitedHealthcare
Consumer Sentiment Survey only seven percent of consumers could successfully define terms such as plan premium, deductible, co-insurance, and out of pocket maximum.

Often, providers self-fund the financing of unpaid patient balances by carrying accounts as receivables, attempting to collect the money directly from the patient. Your EOM reports will tell you if this is you. Until very recently, providers could hope to “outrun” this scenario by compensating through volume. But, the advent of MACRA means those days are gone. Proper technology and improved business practices can effectively mitigate the challenges of self-funding and yield high collection rates.

The InstaMed report asks, “What are consumers demanding?” In a nutshell, payment convenience. I pay almost all of my bills online, using either credit/debit cards, or directly via my personal bank account. The data suggests patients feel the same way about paying their medical bills as they do about other payments – at least when it comes to options. And, lest you think this only applies to millennials, there is no significant difference between generations when choosing to pay their bills online. Providers who insist on patient payments by paper check are headed for trouble – if for no other reason than failure to meet patient satisfaction expectations.

If your practice is still receiving the lion’s share of patient payments via paper check, and you’re feeling a little uneasy, you should. It’s time to get moving.